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Current issues
If we take a step again, one of many core issues that has all the time put me off investing within the enterprise (no matter how low cost the inventory may look) is the shortage of profitability. The corporate has merely been shedding cash 12 months after 12 months. It generates billions in income however nonetheless makes losses. There comes some extent the place traders need income, not simply future progress tales.
Catalysts for a rally
Logic tells me that if Ocado doesn’t go bust, the share worth can’t fall perpetually. Intrinsically, there’s worth within the firm. But for folks to imagine that this worth may improve, one thing must occur.
One catalyst could be the signing of a brand new international companion. These are lumpy and important offers, which not solely would supply a cloth long-term enhance to income but additionally provide credibility with a suggestion that the enterprise mannequin and tech platform works.
One other issue may very well be a continued fall in inflation, serving to to spice up revenue margins for the grocery division. Knowledge launched earlier this month confirmed January worth inflation was 4%. This was a drop from the 4.3% studying from December and the bottom stage since April 2025. If this pattern retains going, it may assist Ocado to get nearer to posting a revenue, even when income stays the identical.
Robust to be optimistic
However even with potential constructive indicators, I battle to see any purpose proper now to make me need to purchase the inventory. Simply because the share worth is closely depressed doesn’t imply it’s undoubtedly undervalued. If something, there’s a robust argument to be made that it’s pretty valued, given the related issues.
If we do see some occasion set off a transfer increased, then I’d consider it to see if it adjustments the outlook, however till that point, I’m going to steer clear.
